As your business expands and becomes more profitable, you may find yourself on the hunt for a commercial property. Acquiring a commercial mortgage can give you more leeway as a business owner to find a building or complex best suiting your trade.
Understanding commercial mortgages
A commercial mortgage, also known as a business mortgage, is a loan used to purchase property for the operation of a business.
A business property is often used to store inventory, as office space for retail operations and more. You can also use a commercial mortgage to refinance a commercial property you already own to make loan terms more agreeable.
Residential loans versus commercial real estate loans
A commercial loan is usually awarded to corporations, trusts and developers and terms usually fall between 5 and 20 years.
Residential mortgages are awarded to individual borrowers, often who are seeking residential properties (such as a house to live in), with a 30-year term being the most popular option.
How do I qualify for a commercial mortgage?
To qualify for a commercial mortgage loan, the property being purchased or refinances should be occupied by no less than 51 percent of your business venture. After this is disclosed, lenders consider the location, profit, credit history and other financial factors to determine if giving you a loan is a good investment.
A residential mortgage is often associated with higher interest rates and fees, so it pays to shop around as a business owner. Working with a commercial mortgage lender, you can hunt down the best loan plans offering interest rates and terms to your liking.
About the Author
Diana Hellman
Diana Hellman's passion for Larchmont inspires her more than 20 year real estate practice. As a certified buyer's representative, "The development of a solid and trusting relationship with my buyers and sellers is what I strive for." This success, primarily built on client referrals and repeat business, comes from her knowledge of what makes Larchmont unique: it's school system, recreational facilities, services and the special qualities that pervade this village's atmosphere. A former educator with a background in psychology, Diana knows that people don't want a sales pitch, but rather reliable, timely information. She and her husband have been residents of Larchmont for over 40 years. Her 3 children have attended the Mamaroneck Public Schools. She can give you expert advice with the sale or purchase of your home. Awards/Distinctions Multi-million dollar club- Westchester Board of Realtors International Diamond Society (8 million plus in sales), 5-Star agent in 2024. Gold Award- WBR (5-8 million dollars in sales) Silver Award – WBR (3-5 million dollars in sales) Memberships National Association of Realtors New York State Association of Realtors Westchester Board of Realtors Westchester Multiple Listing Service Community Former executive board member of the Central School Former selection school delegate for election of school board candidates Former executive board member of the Friends of the Emelin Theatre Former executive board member of the League of Women Voters